When you want to venture in Forex options market, firstly, you should equip yourself with the right mindset, high self-discipline and reliable Forex options strategies. Without having them all, it will be better for you to forget your blossomed dreams to succeed in Forex options market. Possessing them will give you higher chance to manage your fund successfully in the market. Right mindset and high self-discipline should be in your blood, whether you are a trader or not. And reliable Forex options strategies are the weapon you need to achieve your trading goals. Click here to learn more about Profitable Trading.
For that purpose, now let's get to know the most common Forex options strategies:
You will discover two types of directional strategies: bullish strategies and bearish strategies. Bullish strategies are simple buying call option. When a trader predicts a currency pair will move upwards, he/she then simply buy call option to follow the bull run. The key point in this strategy is assessing how high a currency pair can rise. The common strategies of this type are bull call spread and bull put spread.
Meanwhile bearish strategies is the opponent of the bullish strategies which the most important point is assessing how low a currency pair can fall in a certain time period. Bear call spread and bear put spread are the common types of bearish strategies.
These Forex options strategies are implemented when option traders don't know for sure the future direction of a certain currency pair or when they view a currency will soon enter a consolidation phase. Therefore these strategies are also called Non-directional Strategies. The most common types of these strategies are:
Straddle: this strategy implements holding a position at the same strike price and maturity date for both call and put options. The main goal of the straddle is how to make profit regardless of the future direction of a certain currency pair. The straddle is similar to buy and sell a base currency at the same time.
Strangle: this strategy is similar with the straddle only at different expiration date.
There are some other Forex options strategies available. Each strategy has its own advantages and disadvantages. Every strategy also requires some amount of money. If you are a novice Forex option trader, it is important for you to study and exercise it for some time before you eventually deploying those strategies into real trade. Despite its limited risk, you have to be cautious on implementing Forex options strategies as you still need to consider the premium you have to pay. For more info visit Profitable Trading.
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